Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278428 
Year of Publication: 
2023
Series/Report no.: 
Working Papers in Economics and Statistics No. 2023-03
Publisher: 
University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon), Innsbruck
Abstract: 
This paper studies how gifts - monetary or in-kind payments - from drug firms to physicians in the US affect prescriptions and drug costs. We estimate heterogeneous treatment effects by combining physician-level data on antidiabetic prescriptions and payments with causal inference and machine learning methods. We find that payments cause physicians to prescribe more brand drugs, resulting in a cost increase of $30 per dollar received. Responses differ widely across physicians, and are primarily explained by variation in patients' out-of-pocket costs. A gift ban is estimated to decrease drug costs by 3-4%. Taken together, these novel findings reveal how payments shape prescription choices and drive up costs.
Subjects: 
public health
payments to physicians
gift ban
heterogeneous treatment effects
causal machine learning
JEL: 
I11
I18
M31
Document Type: 
Working Paper

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